Pitfalls of land division

Land Divisions can be great project for wealth creation however it pays to go into such a venture with your eyes wide open and to conduct your own due diligence.  Your Land Division project is a complex and costly venture and as a developer you want to have as much certainty about your project costs, timelines and to ultimately maximise your project’s profitability. 

Tip 1 – Engage A Professional That Has Experience 

It is recommended that you get help by engaging an experienced, tried and tested land division professional that can help you review your land division proposal even before lodging a formal application with PlanSA. They can provide very worthwhile advice about the viability of your land division project, what can and can’t be done and the expected costs. They can also alert you to some of the unexpected or non standard costs that may apply.   

Tip 2 – Talk to Your Local Council & Research PlanSA Development Policy  

Talk To Your Local Council and research the PlanSA Planning and Design Code to check your whether your property has the characteristics (e.g. area, frontage width etc) to comply with the Land Division requirements of the Code before any costly decisions are made. The Code requirements for land division can be found on the PlanSA Website. Whilst site area and frontage are some of the basic key elements there often are often other matters that need to be considered with land division proposals, such as land use zoning and Overlays (including Historic or Character overlays, flood plain overlays etc), Water Catchment areas etc. 

Tip 3 – Investigate SA Water Costs

It pays to do the research first and understand whether SA Water non standard costs may apply including;

• dewatering costs – Dewatering is the process of removing groundwater, which ensures excavation work for new sewer connections can occur without trenches collapsing. When groundwater is present, dewatering costs are charged to you. If your land division encounters dewatering costs this can add significant costs to your project.  Recent costs for well point dewatering work in “dewatering” suburbs in recent years have averaged $16,500. SA Water can confirm costs when assessing the land division application. Further information about dewatering (including which suburbs may be subject to dewatering) can be found on the SA water website or contacting SA water direct. A link to the SA Water site is attached with more information.                   https://www.sawater.com.au/building,-developing-and-plumbing/subdivisions/dewatering

1. water & sewer mains extensions – if SA Water sewer and water mains don’t extend as far as your land or your proposed new allotments, you will have to pay SA Water to extend the mains so that the service connections can be provided to the proposed allotments.  Extensions can potentially add tens of thousands of dollars to your project. Whilst the provision of other services will not be a condition of the approval of your land division application, you may also want to check on the availability of other services including electricity, gas and NBN connections – extensions for these services can also be very costly).
2. Other Difficult construction conditions that can impact SA Water costs can include:

• existing services that are within the construction path i.e., high voltage underground power lines
• rocks
• tree roots 
• requirements for traffic management during construction of services – land division on allotments which are near major traffic roadways may incur non standard costs because of the need for traffic management when constructing or connecting services.

Tip 4 – Understand the Impacts of Regulated and Significant Trees 

If there is a regulated or significant tree present on the block or adjacent to your land, it can restrict what you can do and/or add substantially to the costs of a land division project. Councils may want to be assured that the proposed development of the land will not be adverse to the health of the tree. If you have a regulated or significant tree you should talk to your local council and /or a land division specialist and/or an Arborist before undertaking your project.

Tip 5 – Different types of subdivision – be aware of the costs differences 

When looking to develop with subdivision, it’s important you understand the different types of subdivisions e.g. Torrens Titles, Community Titles etc. Getting professional advice will help you to make the best decision for your project.

Tip 6 – Be Aware That Many Factors Can Unexpectantly Extend Project Lead Times 

Land Division can experience unexpected delays to get approvals or comply with requirements. Delays can be expensive, especially if you are borrowing funds from a financial institution to fund your project. 

Tip 7 – Get Financial Advice 

It may be a good idea to discuss your land division investment strategy with your accountant / financial adviser and to understand the possible tax, GST and other financial implications of land division investment strategy.   

Tip 8 – Consider Street Frontage Obstructions 

Street trees, electricity poles, fire plugs, telecommunications and SA Power Networks pits and other public infrastructure can be an issue for your land division project.  They may restrict your plans for development or be very costly to remove or move (if allowed). 

Tip 9 – Review Encroachments, Encumbrances and Easements 

You should understand the impact that existing encroachments, encumbrances and easements may have on your potential land divisions project.  The Certificate of Title will show you if there are any easements or other encumbrances on your land that may impact your land division project. A surveyor or land division professional will help you understand if there any issues related to land division with the allotment.

Tip 10 – Check for Heritage Implications 

There are many properties in South Australia that may have heritage implications.  If your land development property is listed on Council’s Heritage list, a building may not be able to be removed or modified.

Tip 11 – Slope of Land Can Impact Land Division Cost

Some allotments with sloped land can bring unexpected development costs for earth works, construction of retaining walls, stormwater and sewerage disposal. Division of the land may not even be allowed if the slope of the land exceeds what is permitted under the Planning and Design Code.

Tip 12 – Consider Possible Soil Contamination Issues

Contamination in the soil from historical land use (i.e., fuel, chemicals, asbestos) may hinder or add significant costs to your potential land division project. The EPA may place a condition soil testing is undertaken and if contaminated soil is found, it will have to be is excavated and disposed of.  Costs can be significant for testing and proper removal. 

Tip 14 – Existing Dwelling and Improvements

If you are attempting to retain an existing dwelling or improvement on the land as part of the land division proposal, the location of such may restrict whether the land can be divided or the position of any proposed boundary. If modifications are allowed a developer will need to factor in the costs to do so. Building modifications can add significant costs to a project.     

To get assistance with your Land Division and to get a tailored costing for your specific project please call our team on (08) 8344 1522. We look forward to helping you with your land division project.

Disclaimer. The information contained in this publication is a guide only and independent professional advice should be sought before beginning the process of dividing land. Sawley Lock O’Callaghan will be happy to discuss your specific land division proposal.